Morning Read: New Quarter, Conflicting Data

By Brendan Conway

Market check: Stronger economic data in China but a weaker dose in Europe together leave global markets treading water to open the second quarter. As to the U.S., Citigroup strategist Tobias Levkovich deems the country “unlikely to slip back into recession as is feared,” amid growing evidence that businesses are hiring and spending at least part of their cash hoards. All clear for stocks, then, right? “[W]e still consider a 5%-7% pullback as being likely,” he writes. After such a bull run in the first quarter, that should surprise no one if it comes to pass.

Fund watch: Discount broker Charles Schwab (SCHW) is weighing adding a warning when customers trade certain complex exchange-traded products in the wake of controversy over the VelocityShares Daily 2X VIX Short-Term ETN (TVIX), according to Reuters’Angela Moon and Jessica Toonkel. The warning would serve “as a last warning to say, ‘Hey, make sure you know what you are doing. If not, call us and we will explain to you,’” Schwab’s Randy Frederick is quoted as saying.

In the news: China is considering loosening another financial-market restrictions that keep foreigners at arm’s length. The city of Shanghai is testing letting foreign hedge funds and others to raise yuan funds on the mainland for overseas investments, according to the WSJ’s Lingling Wei.

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